Yves here. Please welcome Rob Urie to Naked Capitalism. Many of you will know him from his regular appearances at Counterpunch.

This piece is meant to to be, as Rob put it, constructively provocative. As many have argued, the Democrats have been demonizing the white working class as irredeemable racists, and ignoring that what might look like race-driven actions are not so tidily separated from “competition from lower-wage workers who in my line of work are significantly from a specific ethnic group.” Urie stresses that capitalism has regularly created that very sort of competition.

This pattern has occurred often in American history. Waves of new immigrant groups, when they came and stayed in cities, as opposed to using ports of entry as stopping points to taking up offers of free/cheap land in the boonies, were correctly seen as economic competitors to lower-class “natives” even if those “natives” were themselves American-born children of immigrant parents. It isn’t that long ago in historical terms that Irish and Jews were both seen as non-white in America.

As we have also written, there was an outbreak of anti-immigrant sentiment in America at the beginning of the 20th Century, both from the labor movement, which was beginning to achieve some success, and even from the bourgeoisie, where the concern was loss of American culture and values (with the immediate symptom too many ‘furriners who didn’t speak English well). The National Association of Manufacturers, whose members wanted unimpeded access to cheap workers, launched a very successful Americanization program, supposedly to help new arrivals learn English and become citizens. The intent was to drive a wedge between the working class, who saw immigrants as an economic threat, and the better off, who saw them as a “way of life” threat. That led to the creation of an astroturf group, the North American Civic League for Immigrants, in 1907.

This Americanization movement had business backers in every sizable city with an immigrant population doing outreach to business organizations, church leaders, and other community groups. In 1914, NACLI decided to extend its program nation-wide, and changed its name to the Committee for Immigrants in America. President Wilson spoke at a highly staged “patriotic” event for 5000 recently naturalized citizens in spring 1915. This event was so successful that the movement leaders succeeded in forming local Americanization committees all over the US. That led the Committee for Immigrants in America launched a campaign to establish a national Americanization Day, a day for a ‘great nationalistic expression of unity and faith in America’.

The day was July 4. After the first couple of years, it was rebranded as Independence Day.

By Rob Urie, who writes on politics and economics. He is a political activist and has been a regular contributor to Counterpunch. And for the stout of heart, his book Zen Economics is publicly available

In 1994 several million Mexican peasantswere living with their families, friends and communities in Mexico. Several thousand miles away a group of politicians, economists and corporate lobbyists were negotiating an agreement to destroy the economy on which they depended in order to replace it with industrial imports. Once theireconomy had been destroyed, these people had a choice of going to work for American corporations in Mexico (maquiladoras) for whatever wages they were offering or migrating to the U.S.

The politicians and economists who gave crucial support to this agreement (NAFTA) were liberal Democrats. They presumably didn’t hate the people whose lives they were so radically disrupting. This includes American workers who were placed in manufactured ‘competition’ with these displaced Mexican immigrants. The analytical frame used to justify their actions was basic capitalist theory, ‘economics.’ Two years later Bill Clinton launchedthe ‘criminal aliens’ theme to explain why displaced Mexican peasants were migrating to the U.S.

Graph: immigration to the U.S. began to rise rapidly in the mid-1990s with passage of NAFTA. Much of it was driven by the havoc that NAFTA wreaked on the peasant economy in Mexico. American industrial corn flooded Mexico making the local corn that the peasants depended on for income no longer viable. The political architects of NAFTA soon thereafter began to demonize Mexican immigrants. Barack Obama’s gift to civility was to deport more immigrants than any other president before him without displaying any apparent animosity toward them. Source: migrationpolicy.org.

Popular perceptions and social mythology have it that capitalism and racism (and xenophobia) are driven by separate and distinct motives. Capitalism is about work and products and racism is a hateful attitude toward people based on race. When considered together, these premises establish the paradoxical relation that (1) race-based differences in economic outcomes must be based on racism and (2) because capitalism is racially neutral, there must be substantive race-based differences that explain differentiated economic outcomes.

This either / or conundrum supports the liberal / progressive explanation for the persistence of institutional racism. Deficiencies in ‘human capital’ such as education and acculturation must be overcome for all people to partake in the bounty of Western capitalism, goes the theory. Otherwise, profit-seeking entrepreneurs would hire equally-qualified blacks and immigrants at lower wages until systematic differences in wages and employment disappear. As the facts have it, this turns out not to be true. The question then is why?

Graph: the liberal/progressive answer to institutional racism is education, the building of ‘human capital.’ However, at every level of educational attainment blacks are paid less than whites. According to free-market economics, employers should hire equally-qualified blacks at lower wages until this difference is eliminated. But this has not happened. In fact, as blacks made economic gains under Lyndon Johnson’s ‘war on poverty’ and affirmative action, trade agreements, and with them cuts to social spending and labor outsourcing, were used to increase the supply of labor. This had its intended effect of lowering working class wages. Source: epi.org.

As several of the graphs in this piece suggest, race-based differences in economic outcomes for working class workers have remained approximately unchanged over the last thirty or so years. No determinable difference is observed between liberal (Democratic) and conservative (Republican) administrations. The question then is: does racism explain the difference in race-based economic outcomes or is some as-yet unexplored factor at work?

Analytically, if race is the frame, then race is the answer by default. Conversely, the predominant economic outcome of the last half-century is the concentration of income and wealth by a tiny ruling elite. The scale of this concentration far outweighs differences by race. Business executives went from earning 20X what the average worker earned in 1970 to 270X today. In comparison, the difference between white and black incomes and wealth remained (1) inequitable, but (2) relatively unchanged.

Graph: as institutional racism has persisted the broad question of who benefits from it needs to be answered. Since around 1980 the economic fortunes of the working class have deteriorated in approximate proportion to the rising fortunes of a tiny ruling elite. This has taken place while the relation of black and white wages and wealth have remained inequitable but constant. Race divides the working class to the benefit of this ruling elite. Source: Thomas Piketty/Equitable Growth.

Back to NAFTA (North American Free-Trade Agreement) for a moment: imagine yourself working a line job at an auto factory with a family, a mortgage and kids to raise. One day in 1995 the boss comes forward with three displaced Mexican immigrants in tow to tell you that they have been offered your job at one-third of your wages as other factories are being closed to be reopened with ‘new’ workers in Mexico. This type of manufactured economic ‘competition’ breeds social divisions even without Bill Clinton railingagainst ‘criminal aliens.’

This isn’t to understate the social iniquity of institutional racism. But it is to question the liberal / progressive canard that working class racists have any material bearing on its existence or persistence. Racial animosity certainly exists— four hundred years of white terrorism against blacks is historical fact. But as argued below, capitalism can cause institutional racism outside of racial animosity. And the ‘deplorables’ canard is especially offensive given the role of liberal economists in engineering the economic facts that racism and xenophobia are being exploited to explain.

In the current era, when NAFTA was passed, Mexico was floodedwith American industrial corn. Its lower cost destroyed the peasant economy in Mexico by rendering locally grown corn ‘uncompetitive.’ This cut the peasants whose livelihoods depended on selling their corn out of the cash economy. Millions of suddenly ‘freed’ peasants went to work in maquiladoras or fled North in search of work as undocumented workers. Without racial or national animosity, NAFTA created a new sub-class of industrial labor.

In the context of labor coerced through manufactured circumstances (work for us or starve) and control of government by the industries doing the employing, the idea of market wages is nonsense. And therein lies the point. The ‘free-market’ way to entice labor is to pay the wage that people are willing to work for— without coercion. The ‘capital accumulation’ theory behind NAFTA— that sacrifice is required to accumulate the capital that makes capitalism function, (1) begs the question: function for whom and (2) was also used to justify slavery.

A crude analogy would be to set the CEOs of major corporations on life rafts in the middle of the ocean and let them ‘compete’ with one another for bread to eat. A ‘market’ would have been created for bread, so how is this not ‘free-market economics?’ These CEOs could be dubbed a ‘criminal flotilla’ intent on invading the U.S. and political talking points could be traded regarding whether or not they are actually human. As with NAFTA, few, if any, would likely volunteer for the privilege. This is how ‘natural’ the economics behind NAFTA are.

By the time NAFTA was fully implemented the powers-that-be behind its central policies busied themselves creating racialized explanationsof Mexican immigration to the U.S. In their telling, NAFTA had nothing to do with the millions of Mexicans leaving Mexico for the U.S. or for the rapidly declining fortunes of American workers who suddenly faced competition for their paychecks from people willing to work for whatever they could get. ‘Criminals’ and ‘freeloaders’ were coming for American jobs went the carefully-crafted storyline.

The actual engineers of NAFTA were corporate lobbyists, ‘free-market’ economists, industrialist-friendly Republicans and Wall Street-friendly Democrats. There wasn’t a working class racist, a ‘deplorable,’ to be found amongst those crafting these policies of mass economic displacement. Liberal / progressive champions Paul Krugman and Bill Clinton were enthusiastic supporters of NAFTA and ‘free-trade.’ Paul Krugman, in particular, rode herd over critics of so-called free trade claiming superior knowledge. And Bill Clinton decries Trumpian xenophobia while being one of its major causes.

Of current relevance: (1) different classes of workers were created and placed in competition with one another to benefit a tiny ruling elite, (2) the interests of this elite were / are centered around pecuniary and political gain, (3) after implementation racialized explanations were put forward in lieu of the original economic explanations used to sell these programs and (4) these explanations followed the creation of the racialized ‘facts’ they were conceived to explain. The temporal sequence is important— mass immigration from Mexico and the destruction of the American working class were well-underway before racialized explanations were put forward to explain it.

What bearing does this have on institutional racism and its causes? The neo-colonial economic model is about coercing labor apart from whatever racial and / or national animosity might exist. American industries could have offered market wages to the Mexican peasants that NAFTA targeted until they agreed to work for them— this is the way that labor ‘markets’ work. But instead they chose to ‘free’ several million people from subsistence economies to compete with previously displaced Mexican labor and American industrial workers with the result that wages were lowered all around.

The argument was made at the time, and is still made today, that ‘everyone’ benefits from massively disrupting the lives of millions of people with trade agreements. Theoretical proof is put forward in terms of dollars / pesos of GDP gained. Left out is that the Mexican peasant economy wasn’t monetized and therefore its loss wasn’t counted. Even on its own terms NAFTA was a loser. And imposing these outcomes from above makes them profoundly anti-democratic. In other words, even if the outcomes were as promised, the decisions were made by its largest beneficiaries, not those whose lives were disrupted.

Inhuman Capital

The Anglo-American version of slavery was a more insistent form of coerced labor. Chattel slavery was a system of economic expropriation where human beings (slaves) were conceived as capital. The fact of chattel made plantation owners capitalists who owned slaves as ‘factors of production.’ ‘Human capital’ is a term of modern business meant to describe the value workers bring to the production process. Plantation owners ‘invested’ in slaves and their profits were plantation revenues minus costs. Modern capitalists invest in plants, equipment and hire ‘human capital’ and their profits are corporate revenues minus costs.

Graph: Wealth is the value of what people own minus any debt owed. Since the so called founding of America whites have had greater wealth than blacks. However, the frame of race obscures the class relations that determine who the real beneficiaries of American capitalism are. The difference between the wealth owned by American workers, black or white, is microscopic compared with that between most people and the very rich. In fact, when confrontedwith how wildly disparate income and wealth distribution are, most people are incredulous. Source: urban.org.

As uncompensated labor, slavery reduces employment and wages for the non-chattel working class. Without slavery, plantations and factories hire labor and pay it the prevailing wage. But doing so reduces profits. Then consider: this dynamic places the working class in direct competition with more deeply exploited classes, be they slaves, descendants of slaves or displaced peasants. This economic relationship of competition is (1) imposed from above and (2) socially divisive by being economically divisive.

From slavery through convict leasing, Jim Crow and the New Jim Crow, the economic lots of American blacks were never left to market forces. Each of these institutions were used to expropriate the product of black labor outside of market forces. And this racialized economic ‘management’ impacted labor markets more broadly through controlling the supply of labor. What this means is that ‘management’ of black labor was to manage the supply, and with it the price, of the entire working class, not just blacks.

In human terms, unless the source of this systematic exploitation is made visible, the class dynamic that it establishes is to make the most deeply exploited the most blameworthy. Slaves, descendants of slaves and displaced immigrants were never the creators of the circumstances of their exploitation. The fallacy of ‘takers’ that unites white racist chatter confuses state strategies to maintain relative class positions for employers with the power to expropriate social resources. The class that largely controls economic outcomes remains well-hidden in this ruse.

So, did racism cause the Anglo-American variant of slavery or did slavery cause racism? As the history books have it, different incarnations of slavery preceded its Anglo-American manifestation by millennia. Anglo-American slavery, like most its predecessors, was primarily an economic institution. This is partly demonstrated by the persistence of strategies of economic expropriation that followed the formal end of American slavery. As argued in this piece, institutional racism is one of these strategies.

Nothing argued here contradicts the theses of white supremacy or settler colonialism. The relation of these to ‘market’ colonialism, of which NAFTA is an example, is that earlier strategies of economic expropriation and exploitation were likewise given theoretical explanations iteratively after economic relationships had been established. Slavery preceded the concept of race, if not manufactured social divisions explained in different ways. Bill Clinton could have given an economic explanation of the causes of the Mexican diaspora. But he chose to slander those affected instead.

American culpability for the Northward migration caused by NAFTA is nowhere to be found in official explanations of ‘illegal’ immigration. And no racial or xenophobic animus is to be found in documents related to NAFTA because they weren’t motivating factors. Xenophobic explanations came largely after the migration had run its course. In similar temporal fashion, slavery existed primarily as an economic institution for millennia before race was conceived to give its Anglo-American form a ‘natural’ basis. But conceiving race outside of its material basisobscures more than it illuminates.

Many of the more repressive modern corporate business practices were conceivedand implemented on American plantations to ‘manage’ slaves. And as the outsourcing of American labor since the 1990s has demonstrated, employers in the present most certainly understand the impact that managing labor supply through a racialized variant of Marx’s ‘reserve army of the unemployed’ has on the broader labor ‘market.’ What isn’t well understood amongst workers is this relation of institutional racism to their own diminished fortunes.

Graph: Labor Force Participation is the percentage of a given population that is employed. The persistently lower rate of black labor participation is evidence of institutional racism. Through slavery, convict leasing, Jim Crow and the New Jim Crow, black labor in the U.S. has been systematically expropriated. In other words, whatever employers might believe about race, institutional racism gives them economic advantage over the black working class. Higher unemployment and lower wages for the black working class lowers wages for working class whites. Monthly data is smoothed using a five year moving average. Source: St. Louis Federal Reserve.

When it is conceived as racial animosity, resolving racism requires changing minds without first resolving the material bases for social divisions. National Democrats have spent thousands of hours over the last three decades talking about racism while promoting economic policies designed to foster social divisions— in class terms, intra-class divisions. The practice of the political leadership and the American bourgeois to blame ‘down’ when it comes to racism, to conflate manufactured racial animosity with culpability for economic outcomes they (pols, bourgeois) conceived and implemented, is misdirection with a purpose.

As history has it, the Anglo-American version of slavery is inexorably tied to the Anglo-American version of capitalism. In addition to all of the other social ills that it represents, the concept of raceas basis for hierarchical social division remains irresolute to the benefit of the rich and the bourgeois bureaucrats who labor in their service. The impact of NAFTA in ‘liberating’ Mexican peasants from sustainable economies to join the global labor ‘market’ was used here as a metaphor for the complex relation of economic class to race.

Ending racism in all of its forms would serve the purpose of social reconciliation and ending social injustice. The aspect of racism that is most readily resolved through political means is institutional racism, economic outcomes that are differentiated by race. Economic democracy is a term for the elimination of coercive economic power. The New Deal took steps in this direction. But it was motivated by the desire to save capitalism, not from an enlightened view of social reconciliation through the elimination of class conflict. Economic democracy would end the motivation for institutional racism.

A Federal jobs program offering a guaranteed job to all comers at a living wage would eliminate the threat that racist bosses, landlords, etc. pose to anyone’s ability to earn a living. This idea has been put forward by MMTers from their perspective, Marxists from their (my) perspective and now Bernie Sanders has taken it up. Employing all comers could quickly eliminate the ‘reserve’ character of marginalized and displaced labor through equalizing economic outcomes for a broadly considered working class. It would also be a step toward redistributing social power to create a true democracy.

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65 comments

Rob Urie: Thanks for bringing this issue to light. I’ve heard other lefties mention it in passing but nobody’s really explained the mechanics in detail before. I especially like your framing of, “Capitalism isn’t inherently racist but it sure does pay well to pit different ethnic workers against each other.” And I’ve never thought of liberal anti-racism as being part of the problem, but you make a very good case for that.

But, my man. Work on your compound sentences. Your syntax is, I don’t want to say a nightmare, but it’s not as good as your ideas are. A lot of your verb choices are frankly baffling. And using 10 long words when short words would do, doesn’t make the sentence 10 times as smart. I’m only being a big jerk because I really want to see these ideas catch on.

Well, thanks for your comment, schultzzz. Reading the post this morning, mind abuzz after a hefty does of caffeine, it felt as if I were viewing it through a haze. Great nuggets of information were there, it simply wasn’t crystal clear. Could be the result of spending a lot of time reading Marx.

My mind cannot deal with Marx. Maybe because I am too literal, too image-oriented? I can’t absorb abstractions because I can’t form ‘pictures’ in my mind. Maybe you are similarly constructed, schultzzz? It’s not really Rob Urie’s fault; nor is it our fault.

Urie has made a heroic attempt at condensing tomes of history, data, analysis and philosophy into a short blog post. And trying to explain how capitalism is built on the subjugation of humans beings, on slavery and genocide and repression. Humans who are kept in line by convincing them that it is the other worker, with the darker skin and the funny accent, who is responsible for our misery. Thomas Piketty, Michelle Alexander, James Baldwin, Howard Zinn, Naomi Klein, Malcolm X, Nancy Isenbery, Martin Luther King, Richard Slotkin, Karl Marx and a dozen other writers are out there waiting to be read.

regarding Marx and abstraction vs. literalism: as an antidote, focus on the long passages and chapters in Capital (v1) where he goes in heart-rending detail into the physical conditions of the British workers. Sometimes I think he was Charles Dickens’ research assistant.

I find it strange that in an analysis of NAFTA, there is not one mention of Canada – one wouldn´t even know from the article that Canada was part of the deal – and the fact that hundreds of thousands of Canadian jobs in industry went south to low-wage, non-union, right-to-work ghettos in the USA.

Mark, when you make a broad statement that “hundreds of thousands of Canadian jobs in industry went south to low-wage, non-union, right-to-work ghettos in the USA,” it would be helpful if you provided some proof, statistic or link so that we could check your sources. I looked at this website and it seems to say that there were no clear cut changes in Canada’s economy and Canada had already agreed to give its oil to the US before NAFTA was agreed to.

Good stuff! Lots of good data and explanations. It’s very important to get the horse and the cart right in understanding economic insecurity and racism.

It’s also worth digging into the history of the early 20th century to see how these issues were ‘resolved’. The door was slammed shut to immigration and jim crow reached its height around this time.

I think we can debate whether and how to shut the door to immigrants (# of visas issued needs to be part of the discussion) but clearly jim crow was a disgusting part of american history and we need to organize and present alternatives.

Then again, looking at mass incarceration…perhaps we’re already too late and it’s just another mess than american society needs to reconcile???

To say in the early 20th century their was a backlash against immigration from the labor movement is to point with way too broad a brush. In many cases immigrants WERE THE LABOR MOVEMENT.

Since this is a day after May Day one only needs to read about the Haymarket affair, the strikers were often immigrants. Immigrants fought many of the most basic fights. Why? Probably because they were often working the worst jobs – there was a real ethnic division of jobs then which does align with the subject of this essay. The most radical factions of the labor movement, the communists, the socialists, and most notably the anarchists and the IWW etc., were often heavily immigrant. Such movements grew in immigrant neighborhoods in the northeast.

It’s not that non-immigrant labor didn’t have their own causes for striking and unionzing of course and their own concerns, but often less extremely dire and radically so as they were one step up on the lowly totem pole. The backlash against immigrants in the early 20th century was in large part BECAUSE they were part of radical movements. They threatened to push America left. I am doubtful many immigrants now are such a radical challenge to the status quo but …

I would be happy to think the USA is not exceptional in its genesis as a nation. That it alone had not obliterated a three-thousand mile swath of brown families, communities and nations of people existing on the land and glorified that genocide in tales and films. That we had not founded an economy based on the capture and owning and breeding and buying and selling of black bodies. And continue to revere the heirs of those who profited from this system, including northern financiers and merchants.

And, like ‘free market,’ I’m becoming confused and leery of the term, ‘capitalism.’ It seems to be becoming looser and more amorphous. Industrial capitalism, for example, just seems to be a renamed version of slavery; slavery-lite. When the actual buying and selling of bodies became illegal, when the lash and slave patrols were outlawed, we just switched to a more benign form of coercion; wages just high enough to keep the wolf from the door, plus the constant threat of unemployment. And, now capitalism may be morphing back to feudalism, which in itself was a form of slavery.

Doesn’t racism exist in many other countries? To pick an example, Rwanda? Another example would be the Soviet Union? After Stalin, If you weren’t Russian it was unlikely to get to the top? Yes, there are exceptions.

And let’s not forget Japan vis-a-vis Korea as another example. In fact, Japan vis-a-vis anyone not Japanese, generally speaking (this statement is based on a few years of experience living in Korea).

Capitalism as practiced here in the U.S. and other countries isn’t the sole cause of racism, human group dynamics in general plays its part. But U.S. style Capitalism is doing nothing to improve the situation with NAFTA being a prime, good, example.

The Soviet Union was probably one of the most successful multicultural societies in history. After World War II, the satellite republics and states were encouraged to embrace their own culture and language as a means of resisting the cosmopolitan bourgeoisie. It was only after the USSR collapsed that things got really out of hand in some of these places (Yugoslavia, for example).

Tribalism has always existed, but it’s been based on things like language, culture, and religion–things that people can change if they wish. It’s possible to join a different tribe. If you look at the ancient world, what mattered was language–a barbarian was someone whose speech sounded like “bar bar”, unintelligible words to “civilized” people.

Racism is a historically new concept–it says you are something that cannot change, so you are inferior or superior no matter what you do.

After Stalin, If you weren’t Russian it was unlikely to get to the top?

Actually that is not quite right.

Malenkov who followed Stalin was an Ottoman
Khrushchev who followed Malenkov was born on the Ukrainian border to Russian parents but considered himself also a Ukrainian
Brezhnev was born in Ukraine to Russian parents and would have considered himself also Ukranian
Gromyko who followed Brezhnev was Belarusian
Andropov was Russian (Cossacks)
Chernenko was Ukrainian
Gorbachev was an ethnic Russian/Ukrainian
Yeltsin was Russian – but he was the one who gave up Ukraine when the USSR collapsed instead of keeping it as part of Russia
Putin is Russian

And you could also say that all of them considered themselves ‘Russians’ also. It is not a clear cut thing.

To this day about 25% of the members of the Russian Duma are at least part ethnic Ukrainian. Russians make up about 80% of the total population today.

Part of my family is from Russia and I have good friends who are from Ukraine. What is Russian and what is Ukrainian is a very murky thing. Half of Ukraine fought for Hitler and half fought for Stalin and Mother Russia. Fights can break out very easily.

I also think the comparison with early 20th century provides and interesting framework for looking at the clinton era landmark accomplishments…

1) the 1994 crime bill paving the way for a new jim crow. Incarceration functioning as a kind of ‘jobs program for some’ at the expense of millions of prisoners and their devastated families and communities. But it worked to the benefit of private prisons, construction companies, unions for prison guards, etc.
2) NAFTA finalized around that same time unleashed a new front in the assault by capital on working class wages.

I always attributed black incarceration to Nixon the war on drugs etc.. Blacks were getting too “uppity” and rebellious. But when actually did mass black incarceration start under Nixon or under Clinton? It actually does seem to have preceded Bill Clinton but not to have immediately followed Nixon’s war on drugs either.

As I see it in 1968 the great man , Martin Luther King Jr., the towering figure of peace and justice, was killed. Shortly thereafter the greatest wave of social unrest to hit the U.S. since the civil war (according to Wikipedia) took place as a protest over his death. It was largely black. It was of course not the only unrest or the only racial unrest taking place in the U.S. in the 60s just an example and the biggest. In 1970 the Nixon administration passed the war on drugs which has almost been admitted to be targeting blacks (and hippies).

However blacks as a percentage of prisoners seems not to have gone up a lot until 1990 or so but before Clinton. Or such is the data I can find, I could be wrong there. This was the best I could find trying to answer this question:

As Adolf Reed points out there was a specific pivot away from a push from general downward redistribution, to a reductive horizontal comparison of how each race was doing relative to each other at each income segment. That pivot necessarily cleaved race off as a separate identity, and one that needed specific solutions. Which has run it into the the inherently counterproductive siloing of intersectionality as opposed to a broad based solidarity needed to win power and make changes.

So what did Robinson mean by “racial capitalism”? Building on the work of another forgotten black radical intellectual, sociologist Oliver Cox, Robinson challenged the Marxist idea that capitalism was a revolutionary negation of feudalism. Instead capitalism emerged within the feudal order and flowered in the cultural soil of a Western civilization already thoroughly infused with racialism. Capitalism and racism, in other words, did not break from the old order but rather evolved from it to produce a modern world system of “racial capitalism” dependent on slavery, violence, imperialism, and genocide. Capitalism was “racial” not because of some conspiracy to divide workers or justify slavery and dispossession, but because racialism had already permeated Western feudal society. The first European proletarians were racial subjects (Irish, Jews, Roma or Gypsies, Slavs, etc.) and they were victims of dispossession (enclosure), colonialism, and slavery within Europe.Link

So Marx (in the Manifesto, anyway) was wrong about capitalism atomizing culture and traditional institutions? I’m thinking of the passage that begins, ‘The bourgeoisie, wherever it has got the upper hand, has put an end to all feudal, patriarchal, idyllic relations….’ A racially hierarchicalized social order is certainly an example of a set of feudal, patriarchal, idyllic relations. It would seem much easier to organize and profit from industrial production, distribution, and consumption over a flat (mostly undifferentiated) population, than one broken up into small, mutually conflicting groups. But maybe this analysis is now passé among Marxists? It seemed very accurate to me in my wayward youth. On the money, one might say.

I agree that capitalists who find themselves confronted by racism, sexism, religious prejudices, and so on, will exploit them if possible; that is what capitalists do. But deliberately instigating them, when you might instead be simply putting the proles to work at office, factory, mall, and housing development, and thus increasing profits and power, seems irrational.

The first graph, which compares wages for whites and blacks at the same level of education, seems to need more explanation. The last, which shows black and white labor force participation rates, doesn’t surprise me at all. Blacks bore the brunt of the mechanization of agriculture, and have not fully recovered.

If a epitaph is ever written for white culture, it will read: ‘Devil take the hindmost’.

Possibly blacks more often got their degrees at for-profit colleges, but the labor market devalues these degrees compared to other colleges (some even say they are more useless than NO degree at all or a lower level of degree – say a 2 year associates from the city college which at least is a more respected educational institution).

One could almost get conspiratorial and say the labor market would tend to devalue any degrees that were more often gotten by blacks plus women etc.. And since degrees are as often about “signaling” for jobs as they really are about acquired skills (most people don’t even seem to be working in their major), this might be so!

But the for profit colleges vary widely in quality (I am not prepared to say they are always bad but any given one stands a decent chance of being so) and anyway come with way too much debt.

Agree 100% about how competition and inequality encourages racism, as well as other social tensions.
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The author is drinking kool-aid if he believe that MMT is going to solve the problems of capitalism. Like the New Deal, MMT is an attempt to save capitalism, not to replace it. And like Polanyi’s social democracy, in the long run it will fail — assuming it can even get off the ground –because in the long run capitalist economies are run by capitalists, for capitalists. See Kalecki.
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Also see Erich Fromm. He believed that a society’s culture and values were linked to its economic system. A capitalist economic system, based on selfishness and greed, would result in a culture that was selfish and greedy. MMT cannot change that by yakking about “public purpose.” If you want to have a culture that values public purpose then you have to have an economic system that values public purpose. That would be called “socialism.”

I don’t know why you are mentioning MMT as it is only incidental to the article. MMT is a way of describing how money works in the economy and takes no particular position on capitalism itself, except as an extension on its ideas.

I would argue that values come first. For example, socialism began as a set of ideals before it became a viable economic system. Capitalism required (and still requires) ideologues committed to the enclosure of public goods (privatization) and the establishment of corporations before it is able to exist as an economy.

Unfortunately the modern (post structuralist) left wasted all its theory on deconstruction and never managed to produce a positive program of values; the task of the contemporary left is to first fill this void. We cannot have a new economy without imagining it.

Transitions are challenging, whether a huge demographic bulge between 1880 and 1920 or some other change like NAFTA. Populations, societies and communities need time to adjust and accommodate, and to plan for such. In the words of John Wooden, failing to plan is planning to fail. That planning phase seems to have been hidden, skipped or at best misrepresented in the NAFTA case. Overplayed input from well-meaning deluded individuals like Krugman and his fellow-travelers only exacerbates matters. Overweighted Ivory Tower babble coming from someone who never met a payroll should be discounted accordingly. Call it the Truth-in-Economic Fairness Doctrine.

Planning? At the time one of the features of selling NAFTA with Mexico included, was that Mexican wage rates would climb and eventually equal wages in the US and Canada. There was planning alright. It was a planned deception.

Shortly after NAFTA the Chinese were admitted into the WTO and this same process of pitting “work as slaves or starve” Chinese peasants against the rest of the developed world destroyed what was left.

Also planned, just not precisely spelled out for the chump public.

I like Rob Urei’s idea of putting the CEOs on a raft preferably in shark infested waters, but throw in a few economists to tell them to assume they have a loaf of bread.

Yves, this is a pet peeve: Jews and the Irish have always been seen as white in America. They just haven’t been seen as Protestant. They went to white public schools, they married other white people, they had all the privileges of whiteness. They just didn’t have the privileges of Protestantism. Jews, for example, were seen as so white in America that the Confederacy’s Secretary of State was Judah P. Benjamin–if the Confederacy thought you were white, you were white.

You are right today, but wrong in the past (in the US). Jews from 1900-1970 were seen as radical Left … and the South treated them as non-White. Just because some Blacks were able to pass for White, or some Jews passed for White … are the exceptions that prove the rule.

Jews in the US are accepted today, because they have left the Left circa 1970, in favor of White middle class assimilationism, same as Italians, Irish etc. Most Jews are no longer seen as a threat, so no need to “keep them in check”. Jews are now seen as Republican, upper class, status quo. That isn’t how they were seen in 1930.

Before 1945, half of the US was polled as anti-Semite, same as in Germany. Jews were seen as anarchists, communists, and union organizers. Too Left even for the Democrats under FDR.

In the old South, Jews went to white schools, drank from white fountains, went to white hospitals, were free to marry other white people–segregation did not affect them because they were white in every way. They just weren’t Protestant.

Back in the day, Jews were not quite White. Around 1950, my father (maybe my whole family) belonged to a beach and country club on Long Island which overtly and explicitly excluded persons of Jewish religion or descent. In fact they had posted a sign to that effect in one of their buildings, which is why I found out about it. The Jews were thus in the same general social category as those of African, Latin American, or Asian ancestry, about whom it was not even necessary to post a sign, since real estate practices mostly excluded them from the area. Apparently Irish Catholics could get in, but I don’t recall any obvious Italians or Slavs there.

All the privileges of whiteness I don’t know, we are getting into intersectionality and murky waters. I mean some universities definitely had quotas on how many Jews were admitted, Ivys did etc. Of course that may be upper class whiteness but Jews weren’t allowed into it so readily and it was because they were Jewish. Of course women were also limited in the opportunities open to them in those days. Yea this country was built for rich WASP men, at least the women could marry into it I guess.

Even today, private country clubs, given that they are private, can exclude women, Jews and Blacks … if their bylaws allow it.

All depends on how you define race. Most Jews immigrating in the early 20th century, were considered Slavs, and discriminated the same way as you would against Poles. Some Italians are dark, they discriminate even in Italy between N and S Italy. It isn’t just an African-American concept.

The ghettos were where poor people congregated–Jews and Italians were not forced by law to live apart. Yes, there was private discrimination, but it was based on religion, not whiteness. The law defined whiteness thoroughly during Jim Crow, and Jews and Italians were white people who could marry white Protestants, go to white public schools, and do whatever white people who were not Protestant could do. Just as the 30 Years War was about religion, not race, the history of the Jews in the United States is about religion, not race. Do you think the Confederacy would’ve had a Secretary of State who was not white? Judah P. Benjamin faced social consequences because of his religion, but those consequences did not make him a person of color.

Sorry, we lived in a well off suburb of Boston, Newton Center, that was 90% Jewish. This was not a poor people ghetto. The schools were good, which was why we briefly lived there. I was the only goy at my day camp. This was in the 1960s. Wake up and smell the coffee.

I know older Jews who are can’t get over Jews now being depicted as privileged. I literally heard them say, unprompted, “When did Jews become white?”

In the post the claim seems to be that there was a feedback – americanization day was there because it was already a patriotic day, and then business pushed to make it even more important because of the value of the concept of americanization. Probably thanksgiving has a similar history (as an immigrant, that myth has particular resonances – who is the indian now?)

The original sin of the Democrats is to keep hammering ‘racism’ identity politics instead of building a trans-racial awareness that throughout history the top 0.5% has always put the screws on the bottom 99%. Regardless of race.

Divide and conquer is an old maxim. Race offers a most convenient point of superficial difference to exploit. Capitalism is but one of many mechanisms our chosen sociopaths use to exploit the labor and life of others. I suspect the demon lies in the current forms of human hierarchy. But how and why do sociopaths so often become the tip of human organizations? There seems some flaw in the nature of our kind.

Interesting, and with its heart in the right place, but a bit confused, partly because it’s only addressing the particular case of the US. The author seems to be ready to abandon the conventional wisdom, but doesn’t quite have the nerve to do it. The confusion starts with this extract.

“Popular perceptions and social mythology have it that capitalism and racism (and xenophobia) are driven by separate and distinct motives. Capitalism is about work and products and racism is a hateful attitude toward people based on race.”

Popular perceptions are, basically, correct. What used to be called “racialism” (now the ugly “racism”) is a pseudo-scientific theory of humanity divided into different “races,” popular in the nineteenth century, nearly universally believed by educated people a hundred years ago, and hurriedly buried after the Nazis showed where its talk of dominant and inferior races led to. As an intellectual or pseudo-intellectual tendency it’s now effectively confined to the lunatic fringe. “A hateful attitude to people based on race” on the other hand, is quite different, and effectively eternal and universal. It often has its roots in history (think mutual antipathy between Japanese and Koreans) or economic resentment (overseas Chinese in parts of Asia). It can also be a consequence of massive and sudden population movements.
As far as the West was concerned, slavery was originally the solution to a desperate labour shortage on sugar plantations in the Caribbean, where Europeans could not be induced to go, and profits depended on cutting labour costs to the bone, as it were. Fortunately, Africa had well-developed slave markets, and Africans were very happy to sell their brethren to whites, as they had earlier to the Arabs. And then America etc. etc. Of course, modern relations between slaves and slavers will always reflect their history – you see it in Africa itself in relations between the Ashanti and the Akan, or between the Arab influenced north of Sudan and the southern regions where the slaves used to come from.
That said, employers have always used weaker groups of workers (usually immigrants) against stronger groups, and continue to do so. Some of the earliest Algerian immigrants to France, for example, were used to break strikes in the bitter industrial conflicts that preceded the First World War. I have yet to see any evidence that capitalists (as opposed perhaps to small employers) care about “racial” issues at all, except as a distraction. They are interested in who will work the longest hours, for the lowest wages, in the worst conditions, and that’s often immigrants, whether permanent or seasonal.

The surge happened before NAFTA, after the 1988 election of Salinas and his neoliberal reforms. Furthermore, in 1994 Mexico suffered a currency collapse, which may have had more of an impact on immigration than the passage of NAFTA.

Also, the U.S. admitted 200,000 – 300,000 Asians per year during this period. Why is it that whenever the topic of the “racist economy” comes up, the relative success of Asians is not discussed?

See Urie below. You provide no source. If this is the INS, it would be only documented immigrants.

And confirming Urie’s point, demographers were shocked when the 2000 Census showed a population increase. They had forecast a decline, assuming falling birth rates like other advanced economies. An increase in immigration was the main reason. I did a major study on this for a client so I read the data then very carefully.

Ahem, did you miss the significance of my comment? The INS contemporaneous estimatewas clearly incorrect. Demographers and marketers were gobsmacked by the population increase captured by the 2000 Census, which was largely due to immigration being much larger than anyone had realized.

I get your point. I don’t see how it supports the author’s statement about a NAFTA surge in immigrants from Mexico.

Your statement appears to be related to immigrants from all countries. 9M people legally immigrated into the U.S. in the 90s vs. 7M in the 80s. There are lots of reasons the predictors could have gotten it wrong.

If your proposing that a surge of undocumented immigrants from Mexico happened in the mid to late 90s, I’d be happy to look at your source. According to the INS, the number of “deportable Mexican aliens located by the border patrol” stayed between 1M and 1.6M annually throughout the 90s. If there was a surge in undocumented immigrants, one would expect to see an increase in the number of “deportable Mexican aliens”.

Comparing Black to White Income levels without controlling for income variances across industries or occupations makes this analysis very misleading. For example, if a person were to choose an industry with higher average wages this would swing the race representative results up. It would be great to see an analysis that factors in this piece which would be much more compelling.

The issues on the policy agenda include:
A new migration relationship between the United States and Mexico that reduces illegal migration by combining legal, permanent immigration with well-designed programs for temporary work that protect the labor and social rights of temporary workers and the domestic labor force.

They are hardly an unbiased source.

The MPI data comes from census data, which is only done every 10 years, and surveys, which can be manipulated. The 1990, 91 surge in Mexican immigration would not be easily seen in 2000 data. The INS produces immigration data every year and shows the level of resolution that your statement needs to support it.

Who would have better U.S. immigration data?

I used Mexico because your article specifically discussed NAFTA and a supposed immigration increase caused by NAFTA.

Also, the narrative about Mexican corn production driving immigration doesn’t hold up either. Mexican corn production has been bumpily increasing since 1990 (source). In Mexico, farmers traditionally prefer to grow white corn (food corn) over yellow corn (feed corn). White corn earns a premium in Mexico, is cheaper to produce, and small farmers can use if for self-consumption (source). In the U.S., between 1% (source) and 3% (source) of corn grown is white corn. The predominant corn grown in the U.S. is yellow corn, which is used for feed and fuel. They are two different markets. A supposed “flood” of yellow corn would not impact Mexican white corn farmers.

>“They are two different markets. A supposed “flood” of yellow corn would not impact Mexican white corn farmers.”

This seems like another example of an after-the-fact construct to ‘rationalize’ the effects of the before-the-fact policy. Conjectural extrapolating from unclear, dubious and/or incomplete data.

“capital” still seems a euphemism for power, “capitalism” still seems a ‘network’ of the powerful, and ‘capitalists’ still seem the gatekeepers that keep the outsiders outside and the insiders unaccountable…

Institutional racism as Urie notes is a persistent feature of the labor market. However, there are underlying dynamics, for example opportunities for employment and gender.

The employment-population ratio is a more informative measure than the unemployment rate.

Below I have computed gender-race specific seasonally unadjusted employment-population ratios for 1979 and 2017 from the Merged Outgoing Rotation Groups (MORGs) of the Current Population Survey. These public data are available at several sites. I have use the National Bureau of Economic Research site. (There are some comparability matters which I won’t detail here.

The E-P Ratio is best described as the labor force E-P ratio inasmuch as the E-P/participation ratio includes officially unemployed persons and employed those not at work. Computing the at work E-P ratio shows a bigger decline for white males a slight less decline for black males and increases for white and black females, higher for black females.

Further affecting the employment dynamics are changes in the demographic structure (age) which show differences, but which I am not reporting here. In addition, data on usual median income (in constant 2017 dollars) shows female gains and stable income for males.

Rob, an excellent piece — I was wondering if you’re familiar with historian Edmund S. Morgan’s American Slavery, American Freedom: The Ordeal of Colonial Virginia? It makes essentially similar arguments to your own, looking at Bacon’s Rebellion (1675-6), the Virginia elite’s terror of a cross-racial working-class armed movement, and the subsequent total racialization of slavery in the succeeding decades.

I highly recommend it to all. (Do I recall Lambert talking about it a while back?)

Racism was invented by liberalism in order to justify African slavery in the New World.

Before this era, people had always been ignorant and prejudiced towards foreigners, and they always believed their own culture to be superior to the rest. But they did not think that some races were biologically superior to others. Liberalism developed in Europe and America during the height of the slave trade and colonialism, which were extremely profitable but completely incompatible with this notion of inalienable rights. The solution? Use the budding field of biology to claim that one race is naturally superior to another and that, thus, they weren’t born with the same inalienable rights. This is when theories were developed about the smaller size of the African brain compared to the European one. And once the theory of evolution was developed, people began to argue that Africans were less ‘evolved’ than Europeans.

This is an excellent piece, and I’m excited to read and learn more from Rob Urie.

However, I think there is a flaw in the argument presented here. To summarize, Rob contends that economic realities – created with no racial animus in mind – are set in place, which produce a differential outcome; subsequently, a racist explanation is invented to cover up the economic one.

I think this argument is mostly sound, but I don’t accept the idea that the initial economic reality can be assumed to be without racial animus. The strongest and most important example is the transatlantic slave trade, one of the more heinous crimes in the history of mankind. I don’t think it is possible to suggest that the slave trade could have been conceived without a racial animus – if not, where were the white slaves?

The answer is that slavery had largely been removed from Europe and replaced by serfdom half a millenia earlier, mostly through the common bonds of Christianity. White Europeans saw each other as equals who could not be enslaved. Heathen foreigners, like Native Americans or Africans, however, could be comfortably enslaved with no thought for their humanity (a practice that began with Columbus). As slave races began to Christianize race probably began to become a primary justification for enslavement.

The “economic reality” of slavery thus could not have been created without a disregard for the humanity of certain peoples. I think a similar disregard underpins many of the decisions made by modern elites, such as NAFTA, which entail a criminal disregard for the right of often-brown foreign workers. IMF structural adjustment is not merely an economic imposition, because part of the presumption is the rights of people in developing countries to basic rights like education, health care, etc., are assumed to be less important than loan repayments to Wall Street banks. Meanwhile, the same people who support these policies will fight for public education for (mostly-white) Americans.

A primary difference in values, then, is an important part of the root of creating economic realities. This, too, we should not find surprising – as Rob notes above, economic reality is not “natural”, it is manufactured, and thus we should expect to find the imprint of the values (including racism) of its manufacturers in its form – well before its effects produce (or exacerbate) disparities that need racist explanations.

Read much of your writing at CounterPunch. Also enjoyed this piece, which is a topic I’ve done some reading on in the last few years. A couple of things come to mind.

First, “A Theory of Ethnic Antagonism: The Split Labor Market,” by Edna Bonacich in American Sociological Review Oct 1972. She states the central hypothesis as, “ethnic antagonism first germinates in a labor market split along ethnic lines.” Split labor markets must contain two groups of workers willing to do the same work whose price of labor differs. Also, antagonism refers to all levels of intergroup conflict, racism, prejudice, discrimination, lynching, riots, segregation law, caste, exclusionary movements.

Second, I think the destruction of the subsistence farmer in Mexico needs to touch on a few other points to make it clear how devastating it was. How integral corn is in the Mexican diet. The system of small farms, small tortilla factories, and independent roadside vendors that always struck me as how newspapers were distributed in the US in their heyday. Plus, the fact that before being driven north across the border, farmers were able to get factory work from the whirlpools and RCAs and Fords that moved factories south. Those factories closed to move first to the newer CAFTA countries, and then as China opened up, even farther abroad. But this dynamic was truly destructive because of the NAFTA stipulations that controls on foreign capital, investment and ownership be loosened. Not only did commercialized farming destroy the “Corn economy” in Mexico, they then bought the land that was no longer profitable as a result (at below market prices, too), so that when the factories moved, the workers had no homes to return to (as the land was often owned for generations, and still remained with family until it was necessarily sold for survival). Once they were all displaced (the city workers and elements of family who remained on the ancestral land) the problems were really compounded and the situation dire.

And third, as much as Clinton and third-way Democrats are responsible for very much of the most damaging changes and policies in the US and abroad in the last two/three decades, I think that you make those not interested in nuanced analysis (nobody on this site) more easily swayed towards conservative policies that are misrepresented politically because of the right’s far more effective messaging. Yes, Clinton did these things. But to only mention in passing that it was Wall St. suck-up Dems, along with Republicans and Business owners without pointing out that it was in order to curry the favor of the latter groups, favor that third-wayism and Blue Dog ideologies were created to appeal to, makes it much easier for the novice political mind to pick this up as Academic-grade support for the Kanye-style misinformation that passes for legitimate as of late. Without making that clear it feels as if you let the architects of the neoliberal regime off the hook a bit. As is the case with deficit scolds, the right is very good at creating environments where they can both make the problem but point to others as the source, and then have their preferred policies enacted by their opposition while double-dipping in the goodwill of voters and claiming credit for the results, which help their main constituency.